With the exception of populous

countries like China and India, the

countries of the former USSR are

perhaps of the greatest interest to

life insurance dealers. There are a range of factors

that make Eastern European markets especially at-

tractive. First of all, these countries have a good

raw potential for life insurance: the population of

Russia is about 140 million, while Ukraine counts

over 50 million, and Kazakhstan about 15 million.

Their economies are making strong progress, and

their citizens are being exposed to new opportuni-

ties through a constantly rising level of wealth. The

western structure of goods and services, customer

crediting, and an increasing number of companies

with foreign investment are bringing the population

of the former USSR ever closer to western standards

of life. This means that there are a variety of major

Life insurance in Russia and the former Soviet Union is still at an incipient stage of development, however experts these days are foreseeing a radiant future for the life market. But tomorrow is another day, and currently only a few brave companies in Russia, Ukraine and Kazakhstan are taking their first hesitant steps on the life market. These companies often have little experience in methods which are well developed in the West, such as product development, agent training, information

technology, marketing and underwriting knowledge. And occasionally they simply suffer from a lack of capital. But these insurers are ready and eager to get all

of the above from the west. This is the conclusion that was drawn from the International Conference “World Views for Life Insurance in Eastern Europe,

CIS and Asia” which took place in Moscow at the end of 2005.

Breeders of Life

The Insurer January - February 2006

Insurance

14

uleft Chris Schnor, Member of

Executive Board and Head of

Market Group International at

Winterthur, Switzerland

right Petra Wildemann,

Director for Insurance

EMEA at Hewlett-Packard,

Switzerland

t Dr. Herbert Luethy,

Head of the Swiss

Federal Office of Private

Insurance

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January - February 2006 The Insurer

Conference

15

Bill Toppeta, President of MetLife

International, US q

t right Dr. Olga Ruf-Fiedler,

Vice President and Chief

Underwriter Life, Winter-

thur Group, Switzerland

left Sir Ronald Grierson,

Blackstone Group, UK

cities where a considerable part of the

population is financially ready to accept

life insurance services.

Another sweetener for business is

that companies face hardly any compe-

tition in the insurance markets of these

countries. On the Russian market, for

example, where the level of competition

is considered to be the highest, insur-

ers believe they have covered less than

10% of potential clients. The Ukrainian

and Kazakh markets are even less pen-

etrated, with a very limited number of

insurers.

The focus of the conference was thus

to acquaint national insurers with in-

ternational experience in this area. The

conference attracted interest on the part

of both domestic and western compa-

nies. In many respects, the conference’s

success was the achievement of its or-

ganizing committee, which assembled a

very strong group of speakers, and of its

chairperson Dr. Olga Ruf-Fiedler, Vice

President and Chief Life Underwriter of

Switzerland’s Winterthur Group.

In accordance with the current state

of the life markets in the former USSR,

the conference was divided into two

parts. On the first day, most speeches

touched upon the strategic develop-

ment of life insurers and future market

trends. The second day of the conference

was devoted to discussion of life insur-

ance technologies which are critical for

emerging markets.

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The Insurer January - February 2006

Insurance

16

The conference kicked off with

a discussion of life insurance regu-

lation. The f loor was held by such

speakers as Dr. Herbert Luethy,

Head of the Swiss Federal Office of

Private Insurance, Jukka Rantala,

Chair Senior Accuont Manager for

CIS of the International Actuarial

Association, Ilya Lomakin-Rou-

myantsev, Head of the Russia’s

Federal Service for Insurance Su-

pervision, and Victor Suslov, Head

of Ukraine’s Commission for Regu-

lation of Financial Services Mar-

kets. Insurance is a new regulation

area in Russia and Ukraine, but the

supervisory bodies of both coun-

tries are actively making prepara-

tions, in particular by heeding the

recommendations of IAIS. In this

regard, the Kazakh market has an

advantage because its national law

and regulations copy the European

model.

A more serious concern for Rus-

sian, Ukrainian and Kazakh compa-

nies is choice and implementation of

diverse development strategies. At

the moment, there are no success-

ful life projects in these countries.

Western experience, therefore, is

in great demand. The organizing

committee was able to cover a wide

range of views on the correct orga-

nization of life business.

In the section headed by Sir Ron-

ald H. Grierson, Blackstone Group,

UK, the vision for the investment

climate in the countries of Eastern

Europe and the CIS was reported

by Jonathan Woollett, EBRD,

Director for Non-Bank Financial

Institutions. Subsequently, Bill

Toppeta, the President of MetLife

International, made a speech on

the US approach to encouraging

development in local insurance

markets. His speech owing partly

to its inimitable manner and partly

to the sheer magic of the world fa-

mous company name, was met with

great enthusiasm.

Nonetheless, it was the European

experience that held the day. Chris

Schnor, Executive Board Member

and Head of Market Group Inter-

national of Winterthur Group, and

Andreas Vassiliou, Vice President

of AIG Worldwide and Director and

Executive Vice-President for Alico,

Greece, shared their views on the

development as well as manage-

ment of life insurance business. Dr.

Philipp Kindt, Executive Director

t Top to bottom: Stefanie Appel, CFO at Allianz ROSNO Life, Russia; Andre Bischoff, Gerling,

Germany; Jonathan Woollett, Director for Non-Bank Financial Institutions,

EBRD, UK; Brian Heale, Director for Global Product Strategies at SunGard

Sherwood Systems, UK; Dmitry Demidov, Operational Division Life, Senior

Account Manager for CIS at Munich Re, Germany;

t left Ilya Lomakin-Roumyantsev,

Head of the Federal Service for

Insurance Supervision, Russia

right Victor Suslov, Chairman of

the State Commission for the

Regulation of Financial Services

Markets, Ukraine

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January - February 2006 The Insurer

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17

Top to bottom: uStanislav Gotsuliak,

Chairman of the Board at

Garant Life, Ukraine;

Michael Hergesell, CEO of

Allianz Insurance Company,

Russia;

Stein Fjeld, SpareBank 1

LIVS og Fondsforsikring,

Norway;

for Wealth Management UBS AG,

devoted his speech to the influence

of the oil boom on the growth of life

insurance and asset management

in Russia.

The East European experience

in market modernization was repre-

sented from within. Ivo Foltyn, Life

Insurance Executive Board Member

of Ceska Pojistovna a.s., and Miro-

slaw Kowalski, Executive Director

for Foreign Strategic Investment

PZU SA, are representatives of

two former insurance monopolists

and shared their considerable ex-

perience with the audience. At the

end of the first day, the question of

sales techniques was brought up.

Auke Veenstra, Managing Direc-

tor Business Development Europe

of FORTIS Insurance International

and Dmitry Demidov, Senior Accu-

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The Insurer January - February 2006

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18

Top to bottom:

Dr. Philipp Kindt, Executive Director for Wealth

Management UBS AG, Switzerland

Nikolay Nikolenko, CEO of UralSib, Russia;

Dr. Martin Balleer, Principal Consultant of FJH AG,

Germany;

Auke Veenstra, Managing Director Business

Development Europe at FORTIS, Netherlands

q

ont Manager for CIS at Munich Re,

shared information they had picked

up from Western markets, while

cooperation with MLM-nets was

reported on by Stanislav Gotsuliak,

Board Chairman of Garant-Life,

Ukraine.

Cooperation between the life in-

surance and banking industries, the

role of IT in life insurance, insurance

company asset management – this

is the list of IT concrete technologi-

cal themes discussed at the second

day. Alex Bertolotti, Partner of

PricewaterhouseCoopers Moscow

and Chairman of the Pension and

Insurance Committee of the Euro-

pean Business Association, made a

review of the international experi-

ence in cooperation between banks

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January - February 2006 The Insurer

Conference

19

top to bottom: Jukka Rantala, Chairperson of the Insurance Regulation Committee at the

International Actuarial Association, Finland;

Didier Beck, CEO of e-Center Solutions, Switzerland;

Daniel Adamec, CEO of eBao Technology Europe, Switzerland;

Miroslaw Kowalski, Executive Director for Foreign Strategic Investment at PZU S.A., Poland;

Klaus Hackbarth, WGV-Versicherung, Germany

u

and insurers. Daniel Adamec, CEO

of eBao Technology Europe, spoke

about the technological features of

this kind of cooperation.

Technological aspects of life

insurance were discussed broadly,

then in considerable detail. The ins

and outs of multichannel distribu-

tion were covered by Didier Beck,

CEO of e-Center Solutions, Helve-

tia Patria Group, Switzerland and

his colleague Nick Stefania. Ways

to revitalize legacy systems were

explained by Brian Heale, Global

Product Strategies Director for

Sungard Sheerwood Systems, UK,

while innovative process models

and strategic balance were exam-

ined by Klaus Hackbarth, Deputy

CEO of WGV, and Dr.Martin Bal-

leer, Principal Consultant for FJH,

both based in Germany.

Asset management is of vital

importance for any life insurer.

Andre Bischoff, Managing Director

of Gerling Pensions Management

spoke on a German life insurer’s

means of protecting against rein-

vestment risks.

Before the curtain fell, Prof. Dr.

Peter Zweifel, University of Zurich,

delivered a speech on the subject

of insurance provision, in which he

discussed the benefits of private

versus social, and attempted to il-

luminate future possibilities in this

area. The majority of attendees

were pleased to hear that his vision

of the future life market augured

very well for Russian, Ukrainian

and Kazakh insurers.

The two-day conference brought

together over 130 industry profes-

sionals. All the companies writing

life insurance in Russia, Ukraine

and Kazakhstan were represented.

Such an event could not have been

half so successful without the sup-

port of the sponsors: Rosgosstrakh,

Hewlett Packard, Allianz ROSNO

Asset Management, AIG Life, as

well as PricewaterhouseCoopers,

SAP, eBaoTech.

Vadim Demchenko

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